A third class of photoreceptors has recently been identified in the mammalian retina. They are a rare cell type within the class of ganglion cells, which are the output cells of the retina. These intrinsically photosensitive retinal ganglion cells support a variety of physiological responses to daylight, including synchronization of circadian rhythms, modulation of melatonin release, and regulation of pupil size. The goal of this review is to summarize what is currently known concerning the cellular and biochemical basis of phototransduction in these cells. I summarize the overwhelming evidence that melanopsin serves as the photopigment in these cells and review the emerging evidence that the downstream signaling cascade, including the light-gated channel, might resemble those found in rhabdomeric invertebrate photoreceptors.